The code is supposed to load slideshow.js and slideshow.css on the homepage and appends a block named slideshow into the page layout. the slideshow block's content is editable through a CMS Static Block named slideshow

Now, we have to update the main layout in order to show up slideshow block. Suppose you're using 1-column layout for the homepage, edit skin/frontend/[your theme]/default/template/page/1column.phtml. after the header block is printed out, we output slideshow block:

Nice article! Thanks! I've used it, when I've created the slideshows only with images. But sometimes you need to create slideshow with products or categories. In this case it is better to use professional extension. I prefer Noovias Slideshow - http://www.noovias.com/en/slideshow. Hope I'll save your time.